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US TV Dumping Charges Not Just a Biz Spat: Experts

What lies behind the recent trade spat involving four Chinese TV makers and their US counterparts is not a simple business brawl which can be solved by simply sending a purchasing delegation.

Rather, it reflects more complicated problems and has to be dealt with by taking the interests of all into account, experts say.

"I suppose the dumping charges our firms encountered in the United States are related to more complex problems concerning China's international trade mechanism and the United States' political and economic environment. It has to be tackled from the base up by bearing the overall national trade interest in mind," Ma Yu, senior researcher with the Trade Research Institute of the Ministry of Commerce, told China Business Weekly late last week.

According to Ma, instead of sending a purchasing delegation to the United States with a long buying list, China's trade watchdog has much more work to do to give local firms the upper hand in the international business arena.

"In my eyes, such an act as sending a delegation to purchase US commodities under a huge trade surplus is a thankless and laborious job," he said.

"Actually, what the United States did last week (by raising dumping charges against Chinese textiles, TVs and iron pipes) showed that such efforts from the Chinese side carries no real weight," Ma said.

What China's trade authorities should do is figure out long-term strategies to establish a more reasonable import and export mechanism and better fulfill the country's World Trade Organization (WTO) commitments, Ma said.

"These measures are not only about smoothing Sino-US trade ties, but also necessary steps to accelerate the country's market-oriented economic reform and to keep alive our WTO commitment," Ma stressed.

"Only by doing this, would those who hold discriminative attitudes against China and Chinese firms never find excuses to wage trade wars against us."

According to the international trade expert, US companies may be uneasy about the way Chinese authorities have been handling the soybean and auto financing businesses. China is one of the key importers of US soybean and other agricultural products. And groups in the United States are pressuring China to open more new business sectors, such as auto financing.

"It is obviously not our intention to create trouble with the United States over such small business sectors. It may be due to the fact that different administrative departments act too slow or cannot collaborate well with each other, which makes the US firms and trade watchdogs uncomfortable," Ma said.

Zhang Yuncheng from the Chinese Contemporary International Relationship Research Institute said as the Sino-US trade surplus is mounting and the US Government has to fawn over a clutch of manufacturing states in the lead up to the presidential election, Chinese business people and authorities must act warily and intelligently to avoid any trade disputes.

"Nowadays, the overall US economy features on more demand and less supply, which leads to a huge deficit from Sino-US international trade," Zhang said

However, in the face of the 2004 presidential election and the surging trade protectionism of the country, Chinese exporters are going to be up against it.

Zhang advised: "Under such conditions, various local exporters should never give any excuses to their US counterparts. On the other hand, importers should inject confidence to their US partners by fully communicating with them and conveying the message that their products, especially those high-tech embodied commodities, actually have huge potential for further expansion in China.

"Sending a purchasing delegation and buying up big is not the fundamental solution to resolving the problem."

The US Commerce Department ruled last week that televisions from four Chinese firms were being sold in the United States at less than fair value and announced provisional anti-dumping duties of 28 to 46 percent on the sets.

The US dumping finding was made against TCL International Holdings, Sichuan Changhong Electronic Co, Shenzhen Konka Group Co Ltd and Xiamen Overseas Chinese Electronic Co Ltd.

The ruling follows a US decision last week to limit imports of some Chinese textiles and added to tension between the world's biggest and fifth-biggest trading nations, fanning fears in Asia that the United States was introducing more protectionism.
US television makers and unions complained that imports from China and Malaysia had mushroomed to 2.65 million sets a year in 2002 from 210,000 two years earlier. But no ruling was made on Malaysian televisions.

The Chinese Ministry of Commerce, China's trade watchdog, responded by saying it is seriously concerned about the decision to slap the stiff anti-dumping duties on the TVs, "since it was not based on facts."

Analysts predicted the trade watchdog could retaliate but no details had come to light last week.

"Dumping charges from the United States are groundless, and do not hold water," Yu Yongda, an anti-dumping expert with the Chinese Ministry of Commerce, said.

There are usually two preconditions for any dumping charges. One is the actual harm from the alleged dumping charge and the other is the actual link between dumping and a country's related industries.

"There are few color TV manufacturers in the United States, how can Chinese firms dump their products there?" Yu added.

The core of the charge is that George W. Bush's administration has to please voters from relative industrial sectors, such as textile, electronics and iron pipes, said Wang Youli, an official from the Chinese Ministry of Commerce.

Ironically, the protectionist measures are not designed to defend production in the United States, because it is fairly small, Erik Autor, international trade counsel at the National Retail Federation, was quoted as saying. "It is designed to protect certain other foreign manufacturers, in Mexico, Indonesia and Thailand."

A US-based television company, Apex Digital Inc, is likely to be hurt because almost all of its products are made in China. Its biggest suppliers include Sichuan Changhong Electronic Co.

(China Business Weekly December 8, 2003)

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